What does “cost risk” mean?

Select a service-based industry and answer these questions regarding your selection:

  • What does “cost risk” mean?
  • What two elements contribute to the calculation of cost risk?
  • Explain and discuss the impact of cost risk as it relates to your selection.
  • Explain and discuss why firm fixed price contracts are the greatest motivators of efficiency, as it relates to your selection.
  • Explain and discuss the potential danger of using a fixed price redetermination contract, as it relates to your selection.
  • Explain and discuss the objective that is satisfied by using an incentive arrangement.
  • What are the elements of an incentive contract?
  • Explain and discuss the irony involved in setting cost targets.

Instructions:

  • Your essay will require an organizational structure that includes the introduction section, conclusion section, and individual sections that address each of questions noted above.
  • Write a 3- to 4-page paper (page count doesn’t include the required title and reference pages).
  • Your paper must be properly cited and formatted according to the  APA Requirements.
  • This is an individual paper and you must adhere to CSU-Global’s Re-Using and Re-Purposing One’s Own Work guidelines.
  • You must support your analysis with at least four scholarly references. Sources such as Wikipedia, USA Today, Fox News, or MSNBC news do not qualify as scholarly references.  The CSU-Global Library is a good place to find these sources.